Independence Minutiae: The Crown Estate

Created in 1961, the Crown Estate is a property portfolio run on behalf of the monarchy. The total value of the Crown Estate’s assets in 2014 was £9.9billion, and it raised around £267million in profits which go directly to the UK Treasury.The Crown Estate isn’t personally owned by the monarch, but it consists of large portions of estates and lands held as crown property for generations.

Some of this land is incredibly lucrative, such as large tracts of the West End of London. Then there’s the Windsor estate (which includes Ascot racecourse and Windsor Castle/Windsor Park), pretty much all of the UK’s territorial sea bed and continental shelf, around 55% of the UK’s foreshore and large tracts of land (in particular rural Scotland) where the crown has gaming and mineral rights.

In 2010, it was announced that the royal household would receive a Sovereign Support Grant linked to profits from the Crown Estate as a replacement for the old Civil List. The Sovereign Grant Act 2011 made this law, and ~15% of the Crown Estate’s profits go to support the Queen’s household and the maintenance of royal estates – amounting to around£40million in 2015-16.The Crown Estate in Wales

A more detailed research paper on the Crown Estate, dating from 2011, is available from the National Assembly’s Members Research Service (pdf).

Because the Crown Estate owns the UK’s sea bed and continental shelf, it’s a major player in the development of offshore energy schemes like wind farms. As landowner, it’ll play a major role in the development of the Swansea Bay tidal lagoon (God Save the Queen, Jac) and, as Welsh not British highlighted last week, other tidal schemes like the “tidal kites” off Anglesey.

According to their 2014 report (pdf), Crown Estate property assets in Wales were worth £160.8million and generated a profit of £9.7million (up from £8.6million in 2013). Most of those profits (£5million) didn’t come from renewable energy, but urban retail. Renewable energy only generated a £1.2million profit.

In fact, around half of the Crown Estate’s assets in Wales are tied up in retail, the largest example given being Swansea’s 346,000sqft Morfa Shopping Park next to the Liberty Stadium.

Other examples of the Crown Estate’s work/assets in Wales include:

Marine aggregates (dredging) in the Bristol Channel and Irish Sea.

Offshore wind farms – some of these projects, like Rhiannon and the Atlantic Array have been scrapped.

Smaller-scale tidal energy schemes in Anglesey and Pembrokeshire.

Deganwy Marina.

Estates at Plynlimon (Ceredigion) and Tintern (Monmouthshire), including Tintern Abbey.

Some of the devolved areas impacted by the Crown Estate’s activities include agriculture, fisheries, economic development, planning and aspects of energy/sustainable development.The Crown Estate is currently non-devolved. Although it was included for devolution in Silk II, it was rejected and taken off the table as part of theSt David’s Day Agreement, and is unlikely to form part of a revised devolution settlement in any future Wales Act.

Because Scotland has a separate legal system, and different property laws, the Crown Estate is subject to legislation from the Scottish Parliament. The Board of Commissioners for the Crown Estate also has to appoint a commissioner with specific responsibility for Scotland. However, all revenues still go to the UK Treasury. Despite calls from the SNP Scottish Government for the Crown Estate to be fully devolved, it hasn’t happened yet.

In 2011, the Welsh Government signed a memorandum of understanding with the Crown Estate (pdf) on matters of mutual interest such as marine and rural conservation, with meetings held between both bodies twice a year. The Crown Estate is also given specific recognition in Welsh legislation, such as the recent Environment Bill.

There’s also an arcane ritual in the National Assembly under its Standing Orders where ministers have to announce if they have the consent of the Queen or Duke of Cornwall where legislation impacts their interests (as recently done with the Planning Act 2015).

As the Crown Estate has a sovereign right to prospect for, or issue licenses to prospect for, natural resources on the continental shelf, the current system has come under criticism from nationalists and non-nationalists alike – the former because the idea of the crown holding exclusive rights and generating profits in such a way is anachronistic or behaving as an “absentee landlord”; the latter because it impacts policy areas like renewable energy by providing extra hurdles.

The Crown Estate & Independence

Upon independence the vast amount of the Crown Estate’s offshore assets would transfer to the Welsh Government, even if Wales retained the monarchy – all independent nations have control over their own foreshore, seabed and continental shelf.

The figures speak for themselves though. There isn’t a massive financial windfall awaiting Wales from the Crown Estate even if there were a renewable energy boom, and too many nationalists have gotten their hopes up there. The issue ultimately comes down to who controls the ground beneath your feet and whether any profits generated, however meagre, should be Wales’ by right.

I’m not so sure about “onshore” assets (like estates). If Wales retained the monarch post-independence, then you’ve got to presume things like estates would remain hereditary, or managed by the Crown Estate.

This still doesn’t solve the problem of how the shortfall in royal household spending would be dealt with. Would Wales continue to send a 15% share of Welsh Crown Estate (or equivalent) profits to the “English” Treasury (~£1.5million based on 2014’s figures)? Would Wales fund the monarch from general taxation?

If Wales became a republic then onshore assets would presumably transfer from the Crown Estate to the Welsh Government in its entirety.

Some commercial assets, like the Morfa Shopping Park, could then be sold off or retained as part of the Welsh Government’s property portfolio. Other, less commercial, sites like commons and estates could be held in public trust or transferred to a Welsh equivalent of the National Trust.

In Scotland’s Future (pdf), the SNP intended to use Crown Estate profits for the public benefit of coastal communities, in particular the Islands (Western Isles, Orkney, Shetland). Presumably, the Welsh Government of an independent Wales would want to do something similar, though it’s worth repeating that the sums of money involved are unlikely to amount to much.